nav[aria-label="Primary Navigation"] { padding: 0; & ul { list-style: none; width: 100%; display: flex; flex-direction: row; justify-content: start; align-items: start; gap: 30px; padding: 0; & li { margin: 0; } & ul li { list-style: none; } } }

Child Item

Will Ulster bank do deals or make a huge loss on Offset Flexible Tracker Mortgages.

fliball123

Has anyone any information on how Ulster bank will manage to get out of not giving customers a write down on these mortgages. It looks like no other banks want anything to do with them and for good reason with the way interest rates are rising. If anyone has savings anywhere near the mortgage amount surely as interest rates rise, Ulster bank will be making a huge loss on these mortgages. These mortgages are also slowing down Ulster banks retreat from the Irish mortgage sector. Could they do what Dankse bank did a few years back?

Find more posts tagged with

Quick Links

Comments

fliball123

https://www.boards.ie/discussion/comment/119871165#Comment_119871165

So you think they will go through the expense of staying in the Ireland for a few thousand tracker offset mortgages?? I am not counting on a discount but are Ulster bank counting on a lot of these mortgage holders who may not have savings switching to a lower fixed rate else where? I can wait, Ulster are getting zero in interest from my mortgage so its up to them. I also have the option of top ups which I will be doing and I will sit that extra cash in my account it costs me nothing and my mortgage has a good 13 years to run. I honestly cannot see any banking entity taking these unless there is a hefty discount.

Q&A

https://www.boards.ie/discussion/comment/119871669#Comment_119871669

To me your logic is the reason why offering a discount to customers makes little sense. If even one offset customer keeps their account open they need to maintain a license here with all the associated costs.

The Danske example is a little different as they were an EU bank so could just move anything left around to their HQ and run it from there. Not so easy for NatWest now they're out of the EU. It would be much neater for Ulster to package them up and sell them to another bank.

At full price they are unattractive but at some discount - it might well be a massive discount that values these things close to zero - these loans will represent a good bet for some bank. The question is how does the discount an AIB/PTSB would need compare to the cost of operating a zombie back for NatWest.

I imagine they are getting the easy to value stuff sold first. Hence the tracker and performing mortgage sales to AIB and ptsb. Then they can turn their attention to this niche book. Even with the best intention Ulster will be here for another couple of years so this could be a slow burner (...or the sale might just get announced out of the blue in the future).

L1979

Spoke to ulster bank today about my offset and it seems there is a possibility that Nat West will take over managing these loans. NW are online anyway and we will have online access only.

how would people feel about only having online access to their deposit accounts and in what jurisdiction would these accounts reside? Would they still be covered by the Irish banking guarantee?

they will be writing to offset customers in the next week to 10 days, so hopefully that will provide clarity!

we can only hope!

fliball123

https://www.boards.ie/discussion/comment/119937683#Comment_119937683

I don't think this would be legal (I could be wrong) to move accounts from an EU country to a non-EU country as you rightly point out all accounts are currently covered by the Irish bank guarantee I am pretty sure that would be a very significant change in the mortgages terms and conditions to no longer be covered by this. I am also not sure about the legalities of not having a physical presence in the country that the loans/security backed by these loans are in. Can I ask was this someone in the know telling you this from Ulster bank?

L1979

I was speaking to a member of UB mortgage team and they were extremely confident communication will be received within a week to 10 days.

I for one would not be thrilled with online access only, to my savings.

Unfortunately, as they have left us in limbo, not knowing what their intentions are, we cannot seek independent advice as to the legalities of their proposal!

fliball123

https://www.boards.ie/discussion/comment/119939152#Comment_119939152

I am looking at a thread on askaboutmoney and it looks like AIB may be getting these but there is an outstanding issue of the offset facility. No idea where the poster is getting the info from though.

https://www.askaboutmoney.com/threads/ulster-bank-offset-mortgages-are-not-being-sold-to-aib.228719/page-4

Cooker1

So I think we will be sold en masse at a discount, then we might be able to pay who we are sold to to buy ourselves out. It would be so much less anxiety inducing to cut a deal now. I owe approx €100k, have €50k in my Offset Deposit account. Ulster are not interested in a settlement. I’ve pointed out my house is worth zero and has to be knocked (Defective Concrete Blocks), and will take €100k on top of gov grant (100% redress me hole) to rebuild. If eg. Pepper manage us for an anonymous biggie financial institution and I point out I need a 100k loan, or they own 100% of my rubble, I wonder will they gladly take my 50k savings to cut me loose?

fliball123

https://www.boards.ie/discussion/comment/120020278#Comment_120020278

Just got a letter from Ulster bank saying there will be no movement for my offset tracker mortgage until the summer of next year. Doesn't look like they have these mortgages sold yet.

The J Stands for Jay

https://www.boards.ie/discussion/comment/119939152#Comment_119939152

What sort of access to your savings are you looking for?

L1979

Well, at present there is a physical branch nearby, as well as having online access. Is it not reasonable to expect this to remain the same going forward?

Q&A

https://www.boards.ie/discussion/comment/120038220#Comment_120038220

Natwest decided it didn't want to provide a banking service in Ireland when they had nearly 2 million customers. In a few months you and a handful of other (offset) mortgage holders may be all that's holding NatWest back from posting their banking licence back to the central bank. The chances of them continuing to offer a branch service is somewhere between slim and none.

To borrow a line from another retailer... When they're gone they're gone

Jim2007

https://www.boards.ie/discussion/comment/120038220#Comment_120038220

In a word No. The entire purpose of this exercise it to exist the market and give up their banking license nothing short of that.

walterking

https://www.boards.ie/discussion/comment/119966363#Comment_119966363

Hard to know when its a new poster, but it would make sense and not too difficult for AIB to set up if the fee was right.

Its still a standard offering by some banks in the UK, so not difficult to implement.

as for @L1979 - The branch will be closing soon

https://www.irishtimes.com/business/financial-services/2023/01/06/ulster-bank-to-give-timeline-for-remaining-branch-closures-by-end-of-next-month/

Cooker1

So what’s the verdict? Add savings to equal the mortgage and not pay any interest, or not? Pros/cons please.

Ulster won’t negotiate with me.

By matching my outstanding mortgage in my offset account, am I severely reducing my chances of future negotiations with whoever ends up owning my mortgage?

Also, from way back, I remember an Ulster member of staff saying that once my savings matched my mortgage, or went over a tipping point, they would automatically be used to pay off my mortgage!

phormium

https://www.boards.ie/discussion/comment/120111057#Comment_120111057

Well that bit about when the savings exceed the balance is not true anyway, I have in excess of my outstanding balance for years and it doesn't trigger a redemption although to be fair that was the case in the original current account mortgages CAM when it was initially launched by First Active. When it was changed to Offset branding by FA there were a few changes to how it operated and that was one so you could well have been told that way back.

I haven't paid interest in years, don't know what negotiations you are doing that it might affect.

aoraki

https://www.boards.ie/discussion/comment/120111057#Comment_120111057

Regarding adding savings to equal the mortgage, if you put those savings on deposit elsewhere you'll get absolutely next to nothing, and what you do get you then have to pay DIRT tax on. If you put them in an offsetting account against your mortgage, then you're essentially getting a return equal to your mortgage interest rate. So if your mortgage interest rate is 3%, your offset savings is saving you that amount. To my mind that is a very efficient use of your savings because I'm not aware of any savings account out there that would give you 3%, and you don't have to worry about DIRT. I'm open to other viewpoints on that though.

Regarding your question about matching your mortgage with savings and that affecting any potential negotiation of a discount, I have no idea if that makes your mortgage more attractive to them or less attractive to them, in the context of them selling the mortgage on to another institution. One one hand, I can't see how they are making money off you if you're not paying interest. On the other hand, your mortgage from their perspective is safe as houses, they know that you have the money to cover it. I really don't know. I imagine that if a buyer is looking at taking these on, first and foremost they will be looking to make money on whatever mortgages they buy. Bear in mind that they will most likely need to offer the same terms and conditions and features as Ulster Bank do, ie. the ability to offset. A buying bank would need to build these capabilities before they can accept them, I'd say if UB find anyone to take these on they will probabably have to offer a big discount. There's also a chance that UB won't find anyone to take these on and will need to keep managing them themselves.

And finally to your last point about your mortgage being automatically redeemed if you match it fully with savings. That does not happen. I'm offsetting the full amount of my mortgage with savings and have been for some time, and that did not trigger an automatic redemption.

fliball123

https://www.boards.ie/discussion/comment/120124078#Comment_120124078

Surely the costs of keeping a banking license and the bank branches open in the country (and they will have to keep some branches open as well, they cannot just walk away from Ireland if they have customers based here.) will be a significant cost. Plus the chances of breaches in the banking terms and conditions could cost fines in the millions. I cannot see any bank taking these there is no profit to be made on anything that has the same amount of savings offsetting the mortgage and they will be out the cost of servicing the customer base in Ireland. For me Ulster bank should let things go as they are for the next 12 months a lot of people will have moved by then the only ones left will be the ones with the offset tracker mortgages, then anyone on the offset tracker should be offered a discount to pay their mortgage off and then they can run for the hills.

aoraki

https://www.boards.ie/discussion/comment/120124120#Comment_120124120

I think there's an element of wishful thinking in that. I would imagine that the vast majority of these mortgages are not being covered entirely by savings. I'd say there's a wide range of how the offsetting is used across the whole mortgage book, ranging from no offsetting being used, to some offsetting being used, to some people fully offsetting. But I'd say there's probably not that many people in that latter category. So this book is probably profitable for some bank that has the capability to manage them assuming the price is right.

I think it will be a job-lot type of situation, they will either offload the whole lot to another bank, or they'll continue to manage them themselves. If they continue to manage these mortgages themselves they could take steps to keep their footprint as minimal as possible, ie. they could go to an online-only model, have an offsite call center to field queries from customers etc. I honestly can't see them offering discounts to customers to redeem their mortgages because what happens if some people can't or won't avail of the discount? They are back at square one and will need to continue managing the mortgage.

But this is all just speculation, us normal punters are only guessing what might happen. We'll know in due course, and there's nobody, apart from Ulster Bank themselves, holding a gun to their heads to get them to conclude their business in Ireland by a certain date. They could be at this for years.

Jim_Hodge

https://www.boards.ie/discussion/comment/120124120#Comment_120124120

I think you're just hoping for, or advocating for, something that would suit you. I honestly can't see it happening. Ulster bank will not deal with each of these mortgages individually. It'll be a job lot sell off or self managing.

phormium

Whatever about offering discounts to redeem the mortgages which as you say would not suit everyone as not everyone can refinance elsewhere a better option might be offer all offset customers a fixed rate with option for back to lower tracker should that be more benefit that makes it attractive to switch to a standard mortgage and leave the offset system and then they could just flog them to where the existing ones went.

Mind you a sweetener of a discount off them might be needed as well but I'd say the right rate could encourage most and any like me who are paying no interest due to offsetting, well I might be happy with the discount as obviously I'm in a position to clear the mortgage anyway if I so choose!

Of course that would require engagement with customers individually which most seem to think won't happen. Many years back when CAM (Current Account Mortgage), the original mortgage name when it was launched, changed to Offset there were changes that customers had to agree to individually regarding the payment options and it was managed. Admittedly a more minor change but if it was done before branch closures then each branch would just have to contact their own customers.

aoraki

Another thing that just occurred to me was the non-performing section of the Offset Mortgage book. Normally these would get sold off to some external vulture fund or loan collection agency. But the whole offset aspect might prevent that from happening as well, as I assume that any vulture fund would need to support that capability. Ulster Bank might need to retain these.

This offset thing could be a right pain in the ass for Ulster Bank.

Jim2007

https://www.boards.ie/discussion/comment/120125505#Comment_120125505

Ulster Bank is being wound down and that means that it will go into liquidation at some point and anything that remains will be come part of that process. That means the debt will crystallise and the liquidator will be free to deal with them as he sees fit.

Ginger83

https://www.boards.ie/discussion/comment/120125887#Comment_120125887

When do you see this happening?

fliball123

https://www.boards.ie/discussion/comment/120125887#Comment_120125887

Have you any details or fact behind this?

Jim2007

https://www.boards.ie/discussion/comment/120128539#Comment_120128539

You can go and read up on the company law relating to voluntary liquidations if you wish, it is all there in plain sight...

Nobody can tell you exactly how it will pan out, but I have been involved in enough winding ups to know that nobody involved will be too concerned in the end and therefore it will fall back on the existing company law and peoples obligations to comply with it.

There won't be any future business, so offending the customers won't really matter
The staff have all lost their jobs, so they'll be more concerned about finding new jobs and looking after their families
The parent company has made a very clear decision to close the business down and have made the appropriate provisions in their accounts for the closure. So nobody there is going to be concerned about anything beyond their legal obligations.
Eventually in order to wind the thing down from a legal point of view a liquidator will need to be appointed and their job is to raise whatever they can from the remaining assets, hand any surplus back to the parent company, file the relevant documentation and UB will cease to exist.

I would assume that when UB closes it's doors and probably for weeks before hand, there will be no one around that cares and with that in mind if it were me, I plan accordingly:

Make sure your accounts have been transferred and are operating correctly.
Make sure you have got copies of all final statements of account and make sure you have copies of all statements for the pervious 12 months at least.
Make sure all instructions relating to standing orders, direct debits etc have been cancelled
If the bank held any documents relating to your affairs, property deeds, wills, share certificates etc... make sure you have collected them or get confirmation that they have been correctly transferred to your new bank and so on.
If you have any contract agreements with third parties that were facilitated by UB, make sure they have been correctly transferred or you have ownership and make sure you have all documentation relating to them, if not request copies now
And don't leave things to the last minute, because it probably will not work.

fliball123

https://www.boards.ie/discussion/comment/120129628#Comment_120129628

There is no chance I will be transferring my offset tracker and current account while I am paying zero on interest on my mortgage, just not going to happen. So for people like me who have a contract with the bank they still have to deal with us as no other entity wants anything to do with this portion of the mortgage portfolio this is the only part that they cant sell.

aoraki

https://www.boards.ie/discussion/comment/120125887#Comment_120125887

Yeah, but they have to engage with customers and if there's any action that is encumbent on the customers to take, they need to be given a reasonable timeframe. They are going about this the right way with the likes of savings and current accounts, where they have communicated clearly and early with customers and given them plenty of notice. At some point it is fair enough for Ulster to close those accounts, regardless if the customer has made alternative arragements elsewhere.

However with mortgages, Ulster bank can't just decide to wrap things up on their terms unilaterally ignoring any contractural obligations just because they are "in liquidation" (and voluntary liquidation at that). Unless Ulster Bank want to write them off (hah! as if!) those mortgages will need to be situated with another party. They can't just rage quit without sorting that first, regardless how troublesome it is for them. Consumers have rights.

Q&A

https://www.boards.ie/discussion/comment/120125887#Comment_120125887

I can see how that point would hold if it was a regular mortgage. It could be packaged up and sold on but an offset mortgage is a different beast.

If they could renege on their contractual obligations why wouldn't they do it sooner rather than later.

Let's suppose that they do it anyway. The uncertainty over the validity of the revised mortgage would be a huge negative for any firm looking to purchase the book. The discount on these loans would be as big if not bigger than trying to flog the offset mortgage book as is.

I still don't think Ulster will ever offer a customer a discount on these loans. If their aim is to exit they'd need everyone to take it and not everyone will be in a position to remortgage/pay it off. However, seeing as natwest is taking a stake in ptsb as part of the loan sales perhaps they might try to use their shareholding to 'persuade' them (plus a heavy discount) to buy the book.

McSween

Just post primarily to note thread updates.

we owe 140 and in early january we increased our current account from 40k to 100 in funds. As we know the repayments are rising, interested to see what the interest is ma couple ofdays. 247 interest at beginning of the month.

kerryjack

Got some letter out in the post today with a new terms and conditions booklet in it, didn't get a chance to go through it.